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We recently had the chance to catch up with Eric Lange, product manager, to learn more about Google Checkout, a new service that works with AdWords to help advertisers sell more online and process sales for free. Here's what we learned:

Give us some background on Google Checkout. Why this product at this time?

A growing number of people look to online search when they want to buy and we believe Google Checkout can help make the search and buy experience faster and easier. For shoppers, the goal of Google Checkout is to include more relevant information in search advertisements and make it easier to buy from sellers with a single login--that way, users don't have to re-enter their purchasing information every time they buy online. For advertisers, we want to make it easier to attract new customers and process their purchases for free.

So what exactly is Google Checkout and how would advertisers use it on their sites?

Basically, Google Checkout is a checkout process that advertisers integrate with their websites. Customers who visit their sites can use this checkout option to buy from them using a single username and password. And once they do, advertisers can use Google Checkout to charge their credit cards, process their orders, and deposit funds in their bank accounts. We have several integration options for advertisers to choose from.

How does Google Checkout help advertisers attract new customers?

That gets back to the motivation for the product – buyers often start the purchase process by searching online and they're looking for places to shop that are convenient and secure. Google Checkout makes it easier for shoppers to find these places by displaying the Google Checkout badge on the advertiser's AdWords ads. The badge is like a little sign on the AdWords ad that helps shoppers more easily find stores that accept Google Checkout.

You mentioned processing purchases for free. How does that work?

Put simply: for every $1 advertisers spend on AdWords, they can process $10 in sales for free through Google Checkout. For example, if an advertiser spent $1,000 on AdWords last month, this month the advertiser can process $10,000 in sales at no cost. If advertisers exceed their free transaction processing for the month, they'll only be charged 2% plus $.20 per transaction. The processing fees – or lack of them – reflect what we see as a natural relationship between generating leads through online advertising and processing online sales.